## U.S. Total Factor Productivity Slowdown: Evidence from the U.S. States

_IMF Working Papers, May 28, 2015_

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**Canonical URL:** [U.S. Total Factor Productivity Slowdown: Evidence from the U.S. States](https://www.imf.org/en/publications/wp/issues/2016/12/31/u-s-total-factor-productivity-slowdown-evidence-from-the-u-s-42967)

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## Bibliographic details
- Authors: Roberto Cardarelli, Lusine Lusinyan
- Published: May 28, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513520834.001

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### Summary findings
- Total factor productivity (TFP) growth began slowing in the United States in the mid-2000s, before the Great Recession.
- The commonly cited cause—the fading positive impact of the information technology (IT) revolution of the 1990s—is not sufficient to explain the observed slowdown across states.
- Estimates of TFP growth across the U.S. states show the slowdown was quite widespread and not particularly stronger in IT-producing states or in states with relatively more intensive usage of IT.
- An alternative explanation offered in the paper is that the slowdown in U.S. TFP growth reflects a loss of efficiency or market dynamism over the last two decades.
- There are large differences in production efficiency across U.S. states; states with better educational attainment and greater investment in R&D are closer to the production “frontier.”

### Evidence and analysis across U.S. states
- TFP slowdown timing: mid-2000s (preceding the Great Recession).
- Geographic pattern: slowdown widespread across states; not concentrated in IT-producing or high-IT-usage states.
- Methodology note: the paper produces estimates of TFP growth across U.S. states to assess heterogeneity in the slowdown.

### Interpretation: causes and mechanisms
- IT explanation: the fading positive impact of the 1990s IT revolution is a widely cited hypothesis but does not align with state-level patterns observed.
- Alternative explanation: loss of efficiency or market dynamism over the last two decades is proposed as a key contributor to the TFP slowdown.
- Production frontier: proximity to the production “frontier” is associated with better educational attainment and greater investment in R&D.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/u-s-total-factor-productivity-slowdown-evidence-from-the-u-s-42967_